In the Region/Westchester; Major Home Builders Are Turning to Other Counties

By ELSA BRENNER

October 20, 2002

TURNING away from the county in which they have conducted business for decades, several prominent builders of new subdivisions in Westchester are focusing on Putnam, Dutchess and Orange Counties in New York, and Fairfield and New Haven Counties in Connecticut.

The builders say they are being forced out of Westchester in part by the lack of buildable land left in the county and the high cost of what remains. In several of the most sought-after sections of Westchester -- like Bedford, Harrison and Armonk -- one-acre lots can fetch as much as $1.5 million. In such towns some builders are tearing down existing 30- to 40-year-old homes and building larger ones in their place.

On a lot costing $1.5 million, a builder would ultimately have to charge about $4.5 million after the new home is built to realize a profit on his investment, said Richard Esposito, a builder in Peekskill. On a $700,000 lot, the developed site would need to sell for about $2.2 million, he said. Even in affluent Westchester, there is a limited market for homes at the very high end, the builders said.

The process known as upzoning -- when communities change zoning laws to require larger minimum lot sizes, as some have done in Westchester -- is also driving up the price of building lots. In Somers, for instance, the town raised the minimum lot size in 1999 from one and two acres to two and three acres for residential areas. Mary Beth Murphy, the supervisor of Somers, said the town was not antidevelopment but wanted growth to happen slowly so that the town's roads, schools and other services would not be overwhelmed.

But some developers call such actions shortsighted. ''What it results in are mansions on five-acre parcels, which gives you a low-density look and feel, but it's not the answer,'' said Martin Ginsburg, a principal of the Ginsburg Development Companies in Hawthorne. ''For one thing, only millionaires can afford that. But also, that kind of growth forces builders into outlying areas, and the result that we're seeing is urban sprawl.''

In addition to the lack of available land and the high costs, the builders cited a growing antidevelopment sentiment among both residents and local governments in Westchester as a reason for pulling up stakes. ''I can't quite put my finger on exactly what's at work, but it reminds me of the expression, 'Pull up the ladder boys; we're all aboard,' '' Mr. Esposito said. ''In other words, now that you and I are here, let's not let anyone else come in.''

Mr. Esposito complained about going before an endless number of municipal boards and ''listening to arguments against a project that don't seem to make any sense.'' He said elected officials regularly capitulated to homeowners ''who don't want anything new in their neighborhoods and will find any excuse to keep things the way they are.''

Among his projects, Mr. Esposito, the president of Esposito Builders, has built Orchard Hill Estates, homes starting at $650,000 in Mount Kisco, and is building Pine Crest Manor in Armonk, where houses start at $1.525 million. He is now preparing the roads for his first project outside of Westchester, a 17-home subdivision on 55 acres in Mahopac in Putnam County, where prices will start about $750,000.

The builders who were interviewed said another major deterrent to building in Westchester -- especially when combined with the antidevelopment sentiment in many communities -- was the time-consuming and costly state environmental review process they had to go through.

John J. Fareri of Fareri Associates in Greenwich called the process ''gut wrenching.'' While he still renovates office buildings in Westchester, Mr. Fareri, who has been in business for 30 years, has shifted his residential focus to Greenwich, where he said both the zoning board and the public seem more receptive to new residential construction and the market for very expen sive homes is larger.

Mr. Fareri is building 28 houses in the $3 million to $6 million range in Greenwich at a project called Chieftains. He is also building individual multimillion-dollar homes throughout Greenwich on speculation.

Mitchell C. Hochberg, chief executive of Spectrum Skanska in Valhalla, described ''a convergence of events that is making development in the county difficult or impossible.'' Over the past 20 years, Spectrum Skanska has built more than 1,200 residential units in the county, including BelleFair in Rye Brook, a community of town houses and detached single-family homes centered around a village green and adjacent to the county airport. Mr. Hochberg said that he spent ''only two years'' getting approval for Rye Brook and said it went that fast because local officials were supportive of the project. Up until five years ago, Mr. Hochberg said he was doing 100 percent of his business in Westchester, compared with 25 percent these days.

Spectrum Skanska is building a project similar to BelleFair on 100 acres in Southbury, Conn. ''It's the type of multigenerational project I would have previously done in Westchester and for which there is still a huge demand,'' Mr. Hochberg said. ''But I can't find the land in Westchester, and even if I did, there would be no way to get it approved for development.'' The new project, which is in New Haven County, is called Traditions at Historic Southbury.

Another Spectrum Skanska project, Mansion Ridge, is going up in Monroe, in Orange County. It will have 80 attached town houses and 30 freestanding homes in a gated community on a Jack Nicklaus golf course. The land costs in Orange County, Mr. Hochberg said, are $150,000 to $250,000 an acre. ''And even though the approval process is still cumbersome, the climate for development is much more welcoming,'' he said.

Noting that residents in outlying counties often equate new development with increased property values, he said, ''As a result, many of these sleepy little towns welcome our business.''

Mr. Ginsburg, who has built several thousand new homes in Westchester since 1963, has similarly started building elsewhere. Like Mr. Hochberg, Mr. Esposito and Mr. Fareri, he been frustrated in his attempts to acquire land and to get projects approved.

''If there was a quick rejection process, it would be one thing, but you can spend millions of dollars and many years trying to get a project approved in Westchester before you get turned down,'' Mr. Ginsburg said. ''Just the printing bills alone for the required environmental reports can run hundreds of thousands of dollars.''

SEVERAL of the builders said that five years is not considered to be an unusual time period to spend before a Westchester planning board seeking approval -- and even then the project might be rejected.

Ginsburg Development is building Liberty at Newtown in Connecticut, an adult community of 92 ownership units, up to 3,000 square feet each, in two- and three-story buildings, selling for the high $300,000's to the mid $500,000's. It also has other properties under contract in Dutchess and Orange Counties.

As for Westchester, Mr. Ginsburg said, about the only projects still worth considering in Westchester itself are what he calls ''rescue missions.'' ''By that I mean going in and taking over what previous developers have started, so that the approval process is already in place,'' he said.

Ginsburg Development is completing such a project in Peekskill. The development, called Chapel Hill, is on 110 acres overlooking the Hudson River. Ginsburg took over the project after 16 years and several previous development proposals that were undermined by financial difficulties. Ginsburg Development is adding 194 condominium units to the existing 245 built by the previous developers.

Similarly, in Croton-on-Hudson, Mr. Hochberg is building 124 condominium town houses, called Discovery Cove at Half Moon Bay, to complete a project started by another developer a decade ago.

Mr. Ginsburg looks back wistfully at his projects in Westchester. ''I haven't quite given up on the county, but we try to go where we can do good and where the community welcomes us,'' he said. ''We only want to go where we're welcome.''